VAT-free turnover limit to be Tk 36 lakh

The National Board of Revenue has finalised the VAT-free annual turnover limit for small-scale traders at Tk 36 lakh from next budget, amending the ceiling of Tk 30 lakh set in the new VAT Act, amid strong demand from businesses.For medium-scale traders, VAT at a rate of 3 per cent will be applicable for the turnover range of Tk 36 lakh and Tk 1.50 crore as the NBR decided to raise the turnover ceiling for them, said officials of the finance ministry.As per the new VAT Act, the medium-scale traders are supposed to pay VAT at a rate of 3 per cent for annual turnover between Tk 30 lakh to Tk 80 lakh.Traders who have turnover of more than Tk 1.5 crore a year are supposed to pay 15 per cent VAT but they have been demanding cut in the rate for the last few months. Officials of the ministry said that more small-scale traders would remain out of VAT net while medium enterprises would get more relief if the limits are increased. In addition, it will also minimise inflationary pressure after implementation of the new VAT law, they said. ‘The government is likely to endorse the NBR decision to hike turnover limit for the traders,’ said an official of the ministry. He said that the government would have to amend the law to raise the limits. ‘The law might be amended while the passage of the budget,’ said the official.He said that the VAT rate of 15 per cent for the big traders might also be reduced because of immense pressure from the businesses.